Solana (SOL) is often mentioned as a potential future replacement for Ethereum (ETH). However, this week’s market movements highlight how challenging that goal would be.

In December, a crypto analyst suggested that Solana’s SOL token might surpass Ethereum’s ether (ETH) in market capitalization during the next bullish cycle. This week’s market activity shows the magnitude of that challenge: on Monday, ether’s price jumped over 19%, increasing its market cap by $70 billion to reach $439 billion, according to TradingView. This single-day gain nearly matches 90% of SOL’s total market value.

This surge in ether’s price followed renewed optimism about the approval of a spot ether exchange-traded fund (ETF) in the U.S. Analysts believe the gap between ether and competitors like SOL will continue to grow if a spot ETF is approved, as it would open the token to mainstream institutional investors. So far, only bitcoin has had this advantage.
As of now, ether is the world’s second-largest digital asset with a market cap of $453 billion, second only to bitcoin’s (BTC) $1.38 trillion. In contrast, Solana is in fifth place with a market value of $82 billion.
Ilan Solot, co-head of digital assets at Marex Solutions, commented in an email: “The short-term outlook for ETH is extremely bullish. The ETF announcement is almost a black swan event for most investors. Markets are significantly underweight in ETH, much of ETH liquidity is locked in staking, and the macro environment is favorable.”

Since its launch in 2015, Ethereum has been the leading smart contract blockchain, supporting over 4,000 decentralized applications. It hosts critical decentralized finance protocols like Uniswap, AAVE, and tokenization projects like BlackRock’s BUIDL. Additionally, Ethereum has not experienced outages like those seen on Solana.
During bull markets, some traders have turned to Solana to avoid Ethereum’s network congestion and high transaction fees. For example, Solana’s share of global trading volume on decentralized exchanges increased earlier this year due to the meme coin craze, sparking discussions about SOL potentially overtaking ETH.
However, given the recent ETF speculation and ether’s price performance, such discussions appear premature.